Winning on Amazon: Here are 3 strategies that can help

Ask hard questions about your product assortment and get yourself ready for the 'One Vendor' change on the Brand Registry.

Paraphrasing what Ginny Marvin wrote in this publication recently, 2018 was largely the year Amazon’s ad business matured. But changes like the unification of Amazon’s ad products and the launch of other sponsored product type units on the site also reflect how the online retailer has matured in other ways. Amazon is set to clear $258.2 billion in US retail sales in 2018, according to eMarketer – a full 5 percent of all retail sales – and a far cry from its 1 percent share just ten years ago. To grow market share overall, brand marketers need to mirror their larger Amazon strategy to reflect how the retail site itself is setting its priorities.

1. Focus on share of audience, not share of wallet – and act accordingly

Amazon admittedly isn’t the number one place people buy groceries, but it’s absolutely one of the top destinations for eyeballs when those same consumers are looking at grocery products online. As Sri Rajagopalan from Johnson and Johnson explained in his recent Linkedin post: “I have never heard an Amazonian talk to me about share of wallet… Do not obsess on your Amazon share of wallet, but do, on share of audience.”

Amazon is a branding platform. Sharing this viewpoint across your marketing organization puts your brand in a better position to execute well on the new Amazon ad offerings by better aligning brand and trade marketing budgets and teams. On the unpaid side, it also underscores how marketing-heavy language and content is what you want present on your product detail pages, how that content needs to be actively managed to continually maximize conversions, and even which products are worth that level of effort. To that point…

2. Start asking hard questions about your product assortment

Brands who worked to get their full catalog of products on Amazon years ago may need to scale that back given Amazon’s focus on item profitability. “CRAP out” is now part of the industry lexicon. The increased competition on the site itself necessitates more active management of individual SKUs to maintain visibility and market share. The reality is that brands are going to be hard pressed to profitably sell a wide range of inexpensive products on Amazon.

What are your brand’s highest value SKUs from a margin, visibility, or brand equity standpoint? Focusing on that subset of products, both organically and with paid promotion, will drive substantially more value than putting out “CRAP” fires and the associated chunk of man hours dedicated to that long tail. Meanwhile, looking into e-commerce-oriented packaging can help make some of those latter products easier to sell profitably on the site down the line.

3. Prep for ‘One Vendor’ change by getting on the Brand Registry

The unification of Amazon Vendor Central and Seller Central is on the horizon in 2019. The precise impact of this change for brands is still undetermined, but one thing we know for sure is that Brand Registry will be significantly more important for brand owners in the ‘One Vendor’ world to help combat fraudulent products, and for the purposes of driving improved, trustworthy shopping experiences. Every brand should be familiar with the eligibility requirements for the Brand Registry and, with ‘One Vendor’ coming sometime in 2019, enroll their brand as soon as they are ready.

Remember that ‘One Vendor’ is just one step for Amazon in its long-term plan. Over time, Amazon is sure to make certain capabilities available exclusively to brands who have registered on the Brand Registry.

At a high level, it’s also worth noting that winning on Amazon is increasingly becoming a game of tactics, with brands arming themselves with their product pages and Amazon ad products in a kind of ‘hand-to-hand’ combat with competitors on the SERP. The benefit for brands in taking to heart higher-level strategic objectives shared by Amazon is that these day-to-day tactics naturally roll up to these objectives, giving marketers across an organization a greater ability to execute and win on Amazon more regularly.

About The Author

Andrew Waber is the Manager of Data Insights and Media Relations at product experience management (PXM) platform provider Salsify. In his current role, Andrew manages the analysis, editorial direction, and strategy for Salsify's public facing reporting on the online retail marketplace. Prior to his time at Salsify, Andrew served as the Manager of Market Insights and Media Relations for advertising automation software provider Nanigans, and as the Market Analyst and lead author of reports for Chitika Insights, the research arm of the Chitika online ad network. Andrew's commentary on online trends has been quoted by the New York Times, Re/Code, and The Guardian, among other outlets.